Scott A. Rosen

The appellants appealed an order of the Superior Court of Justice.

The Court of Appeal found no merit to the appeal, agreed with the reasons of the motion judge, and dismissed the appeal with costs.

The appellants appealed a judgment enforcing a settlement agreement, arguing the motion judge erred in ordering a $725,000 payment in cash and seeking to rescind the agreement.

The Court of Appeal allowed the appeal in part, finding the motion judge failed to consider evidence that the parties intended the sum to be paid via security, such as a promissory note or guarantee, rather than cash.

The judgment was amended accordingly, but the appeal was otherwise dismissed, and the request to rescind the settlement agreement was rejected.

The respondent had a claim against a company that went into receivership.

A vesting order transferred the debtor's assets to the appellant, expunging the respondent's claim against those assets.

The appellant obtained an Order to Continue the proceedings under Rule 11 to pursue a counterclaim against the respondent.

The motion judge varied the Rule 11 order to allow the respondent to pursue its original claim against the appellant as a stand-alone claim.

The Court of Appeal allowed the appeal, holding that a Rule 11 order is purely procedural and cannot create substantive rights that were expunged by the vesting order.

The respondent was limited to asserting its claim by way of set-off against the appellant's counterclaim.

The appellant franchisors appealed a trial judgment granting the respondent franchisees rescission of their franchise agreement and damages under the Arthur Wishart Act.

The franchisors argued they had substantively complied with disclosure requirements by providing information piecemeal over several months.

The Court of Appeal dismissed the appeal, holding that the Act strictly requires disclosure in a single document delivered at one time.

The Court also found that the franchisees did not affirm the contract by continuing to operate the business briefly to mitigate losses after serving the notice of rescission, as statutory rescission operates differently from equitable rescission.